On the night of October 4, 1967, at about 11:20 p.m. Atlantic Daylight Time, it was reported that something had crashed into the waters of Shag Harbour Nova Scotia . At least eleven people saw a low-flying lit object head towards the harbour. Multiple witnesses reported hearing a whistling sound "like a bomb," then a "whoosh," and finally a loud bang. The object was never officially identified, and was therefore referred to as an unidentified flying object (UFO) in Government of Canada documents. The Canadian military became involved in a subsequent rescue/recovery effort. The initial report was made by local resident Laurie Wickens and four of his friends. Driving through Shag Harbour Nova Scotia, on Highway 3, they spotted a large object descending into the waters off the harbour. Attaining a better vantage point, Wickens and his friends saw an object floating 250 m (820 ft) to 300 m (980 ft) offshore in the waters of Shag Harbour, Atlantic Ocean Nova Scotia . Wickens contacted the RCMP detachment in Barrington Passage and reported he had seen a large airplane or small airliner crash into the waters off Shag Harbour Nova Scotia

Assuming an aircraft had crashed, within about 15 minutes, 10 RCMP officers arrived at the scene. Concerned for survivors, the RCMP detachment contacted the Rescue Coordination Centre (RCC) in Halifax to advise them of the situation, and ask if any aircraft were missing. Before any attempt at rescue could be made, the object started to sink and disappeared from view.

A rescue mission was quickly assembled. Within half an hour of the crash, local fishing boats went out to the crash site in the waters of the Gulf of Maine off Shag Harbour to look for survivors. No survivors, bodies or debris were taken, either by the fishermen or by a Canadian Coast Guard search and rescue cutter, which arrived about an hour later from nearby Clark's Harbour.

By the next morning, RCC Halifax had determined that no aircraft were missing. While still tasked with the search, the captain of the Canadian Coast Guard cutter received a radio message from RCC Halifax that all commercial, private and military aircraft were accounted for along the eastern seaboard, in both Atlantic Canada and New England.

The same morning, RCC Halifax also sent a priority telex to the "Air Desk" at Royal Canadian Air Force headquarters in Ottawa, which handled all civilian and military UFO sightings, informing them of the crash and that all conventional explanations such as aircraft, flares, etc. had been dismissed. Therefore this was labeled a "UFO Report." The head of the Air Desk then sent another priority telex to the Royal Canadian Navy headquarters concerning the "UFO Report" and recommended an underwater search be mounted. The RCN in turn sent another priority telex tasking Fleet Diving Unit Atlantic with carrying out the search.

Two days after the incident had been observed, a detachment of RCN divers from Fleet Diving Unit Atlantic was assembled and for the next three days they combed the seafloor of the Gulf of Maine off Shag Harbor looking for an object. The final report said no trace of an object was found.

The Shag Harbour reports received extensive front page coverage in the Halifax Chronicle-Herald. The paper ran a headline story on October 7 titled, "Could Be Something Concrete in Shag Harbor UFO — RCAF."[2] The article, by Ray MacLeod, included witness descriptions of an alleged object and crash, the Royal Canadian Air Force's (RCAF) search and rescue effort, and the Royal Canadian Navy's (RCN) underwater search that was underway, including that three additional divers from Fleet Diving Unit Atlantic had been tasked.

Highway sign identifying the incident location at Shag Harbour.

The head of the RCAF's "Air Desk" in Ottawa, Squadron Leader Bain, who recommended the RCN undertake an underwater search, was also quoted, saying the RCAF was “very interested” in the matter. “We get hundreds of reports every week, but the Shag Harbor incident is one of the few where we may get something concrete on it.”

The article also mentioned UFO reports that immediately preceded the incident, including one from a woman in Halifax around 10:00 p.m.[3]

The Chronicle-Herald ran another story on October 9 titled "UFO Search Called Off," stating that the Royal Canadian Navy (RCN) had ended "an intensive undersea search for the mysterious unidentified flying object that disappeared into the ocean here Wednesday night." As to what was found, the RCN stated, "Not a trace... not a clue... not a bit of anything." [4] The story of the search being called off for an alleged "mysterious" "dark object" was also carried by the Canadian Press in some other Canadian newspapers.[5]